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UK luxury e-tailer Farfetch is investing $200 million in Neiman Marcus to drive the swanky department store’s digital growth, the companies announced on Tuesday.
London-based Farfetch is taking a minority stake in Neiman, which also owns the two Bergdorf Goodman stores in New York City. Farfetch will initially focus on the Bergdorf website and mobile app, according to the announcement.
Sources told The Post that Neiman Marcus has recently explored a sale of Bergdorf Goodman. Neiman Marcus denied that it was exploring a sale of the posh retailer.
Details of the strategic partnership were not disclosed, but Farfetch’s shares were down by more than 4% percent on Tuesday.
Neiman Marcus emerged from bankruptcy protection in September 2020, shedding most of its $5 billion in debt and gaining new investors.
The Dallas-based retailer has been investing in its e-commerce business as more well-heeled shoppers turn to online sites for luxury goods.
The companies said that Neiman Marcus and Bergdorf Goodman will join Farfetch’s online marketplace, adding “participating brands” in global markets where Farfetch does business.
“I believe the U.S. luxury market is at a pivotal point,” José Neves, Farfetch founder and CEO said in a statement. “Whilst the U.S. is proving to be a long-lasting source of growth for the luxury industry, fueled by younger generations who are highly engaged with the category, businesses will have to significantly upgrade their digital capabilities.”
There were reports last year that Farfetch and Swiss-based luxury conglomerate Richemont — owner of Cartier, Van Cleef & Arpels — were in advanced talks to launch a joint e-commerce platform.
Neiman Marcus chief executive, Geoffroy Van Raemdonck said in a statement, “José and the entire Farfetch team have built a best-in-class technology platform and are the ideal partner to help us grow Bergdorf Goodman to be an even stronger global digital luxury retailer.”
But some Neiman Marcus staffers and industry experts believe the investment will lay the groundwork for Farfetch to eventually acquire Neiman Marcus Group from its current investors, Pimco, Davidson Kempner Capital Management and Sixth Street.
“Nobody believes that Farfetch has something so unique that it will be a game changer,” one source close to Neiman Marcus told The Post. “But perhaps this is a way to trim costs in technology, let Farfetch learn more about us and then eventually become the owner.”
Current Neiman Marcus employees said the deal caught them by surprise.
“This is a dramatic change from what we’ve been hearing on how well we’ve been doing,” The source said. “Why do we need to leverage Farfetch and it’s platform? A partnership like this means something is not working.”
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